rtcvb32: Disgaea has something similar to this. But instead of you easily defeating the boss and enemies it rewound and you repeat the battle but get a bunch of help from monsters loyal to you. (
On the other hand on the second playthrough you didn't need their help and they didn't come).
Disgaea also does something rather strange. The end of the first chapter has you fighting a boss battle, one that is of appropriate strength for that point in the game. While the battle isn't completely trivial, it is still one that a typical player will win on the first attempt. However, if you lose the fight, instead of the usual game over, there's a special cutscent that includes an ending, followed by the option to start a new cycle, as though you had beaten the game. (In other words, by losing this early boss fight, you just saw one of the game's endings and are on New Game +.) I note that this is the sort of thing that can confuse many players, who aren't expecting to have "beaten" the game that early.
Magnitus: Of course, some games push this to absurd extremes (ex: your character starts the game with 100 hp and by the end, has like 100000 hp and can take on a god and win). Real life tends to impose limits on what you can reasonably hope to achieve, especially by yourself.
That's tame compared to what I've seen in incremental games. Like, in Plague Tree, you go through all that work to get *1* death, then have to keep repeating the two previous layers to get another death (though more of it gets preserved over each attempt), but later you get to the point where, every second, you get well over 1e308 deaths.
(Real life, of course, imposes limits on how many people can die to a disease. A disease would not be able to kill more than the world's population, yet in Plague Tree you somehow manage to do so.)